1,000,000 house

[chevelle]

What kind of gross income do you have to make yearly to afford a million dollar house? I realize a lot of factors determine the house you can afford; income, debt, expenses, etc. But i was just curious!

Thanks-

 

[poohead]

at least 200,000-300,000 a year just to buy the house.

i'd imagine a mill dollar house would have a lot more maintenance costs associated with it - so you would most probably have to be making more than 300k/yr to live comfortably.

 

[Shiftkey]

I kinda doubt that's accurate Poohead. Half of the houses here in OC are getting close to 1mil in value and most home owners here aren't making nearing that much (though they are still much higher than the national average).

 

[S1NN3R]

I kinda doubt that's accurate Poohead. Half of the houses here in OC are getting close to 1mil in value and most home owners here aren't making nearing that much (though they are still much higher than the national average).

And I've seen a janitor that drove a Z06 Vette. He just didn't spend money on anything else.

The general rule is that your home shouldn't be more the three times your annual income.

 

[chickenlegs03]

at least 200,000-300,000 a year just to buy the house.

nope.

I kinda doubt that's accurate Poohead. Half of the houses here in OC are getting close to 1mil in value and most home owners here aren't making nearing that much (though they are still much higher than the national average).

yup.

we have 5 houses in cali. a $2mil, a $1.3mil, an $800k, a $500k, and a $200k.

my dad is the only one who works in my family. he makes around $90k.

it all comes down to not being an idiot with your money. don't buy the $200 shoes and $300 jeans. instead buy your clothes at gap and get a $1mil house and a benz. it's a trade-off. make the right choices, you don't have to be a gazillionaire to live lavishly. and don't get into debt. build good credit.

too bad most people are idiots though. you see people in mobile homes spending $3k on rims for their beat-up cars and living paycheck to paycheck. be wiser than the average fool. it's no wonder 80% of americans are in debt.

and no, we didn't inherit any money. in fact, my dad came to america w/ only $500.

heck, i work part-time right now and could afford to buy myself a m3 (edit: a used m3 for about $60k) if i wanted to. but i won't. what's the point when i can commute with a bike? i want to live lavishly in the future as well.

 

[poohead]

the bank wouldn't let him take out a mortgage loan with those high priced properties if his income was only 90k.

 

[diplomatic_lies]

Most houses in my area are worth $1M now (although in Aus dollars). Most owners seem to be doctors/lawyers/sales managers, so their income is probably $50-100K.

 

[oakraiderz2]

nope.

yup.

we have 5 houses in cali. a $2mil, a $1.3mil, an $800k, a $500k, and a $200k.

my dad is the only one who works in my family. he makes around $90k.

it all comes down to not being an idiot with your money. don't buy the $200 shoes and $300 jeans. instead buy your clothes at gap and get a $1mil house and a benz. it's a trade-off. make the right choices, you don't have to be a gazillionaire to live lavishly. and don't get into debt. build good credit.

BS. 90k will NOT get you $4.5mil in houses. Hes doing SOMETHING else. Gap doesnt have cheap clothes just so you know. So what exactly does your dad do?

 

[poohead]

Most houses in my area are worth $1M now (although in Aus dollars). Most owners seem to be doctors/lawyers/sales managers, so their income is probably $50-100K.

i have doctor relatives - they make 300-500k/yr. lawyers *start* out of law school at 80k, lawyers make 200k easy after a few years.

 

[A-Unit]

Re:

Let's distinguish one thing....between APPRECIATED properties and WHAT you buy today. Granted "someone's father" might have 4.5 million in property, BUT he didn't buy those on 90k at the value they're worth now without partners, creative financing, or having a "side business." Perhaps he paid all cash like Tony Soprano might, but 90k, according to what a BANK WOULD finance, would NOT get a $1,000,000, UNLESS they have SERIOUS assets backing them, and the job @ 90k is "just for fun." Make sense?

Maybe you have 90k EARNED income, and another 100k passive income, or a high net worth, which they would place liens on, but, no one with scratch 90k income and net worth gets a home at 1,000,000 no matter where you are, legit, straight up. And if they do, we are in a SERIOUS real estate bubble being propagated by the banks themselves.

The top out in general is that debt can't exceed 40% total of your net income per month. That includes ALL debt, not just a home. The typical top out would be 28% of net income per month.

If you earn 70k after taxes from 90k, you'd earn about 6k per month, you could service a loan of just under 2k, with principal, interest, insurance, and taxes. Of course, why would you, aside from the fact you have lots of assets behind it, the prospect of easy promotion, or income increases, or speculation on appreciation?

Those aren't "accurate'" figures so to speak, but until you sign on a dotted line, it's not going to be case-specific anyways.



A-Unit

 

[diplomatic_lies]

Nup, not in Australia. The average law graduate in 2005 makes $41K and the average medicine graduate (GP) makes $45K. I've never heard of the average GP making $500K.

Also, you CAN afford a $1M house on a $100K salary.
-Lets say 30K tax, 20K expenses (exclude rent, since you've got a mortgage). That's still $50K saved up.
-WITHOUT investing, you can afford a $1M house in 20 years.

 

[S1NN3R]

nope.

yup.

we have 5 houses in cali. a $2mil, a $1.3mil, an $800k, a $500k, and a $200k.

my dad is the only one who works in my family. he makes around $90k.

Either you're full of it, or he's got mattress money coming in, or they're investment properties making income.

The total mortgage payments for that amount are going to be between $15k-$35k a month depending on things like interest rates, purchase price, program terms, and you think he's paying those all just making $7.5k a month? Sorry, kiddo, but buying cheap jeans and shoes isn't going to make up for that.

You residence should be three times your income, if you have investment rentals they are not included in that figure.

 

[The Antichrist_Star]

Chickenlegs...

Those saran wrapped/duct tape 'packages' that are coming to your house(s) aren't from Fed Ex my friend.

AS

 

[chickenlegs03]

BS. 90k will NOT get you $4.5mil in houses. Hes doing SOMETHING else. Gap doesnt have cheap clothes just so you know. So what exactly does your dad do?

actually, nope.

my dad only makes $90k.

we do have a financial advisor who manages our portfolio. lots of money in stocks and various investments. also, he used the equity in other properties to use as downpayments. my parents are also quite financially savvy. with their help i opened an ira recently...which most people my age don't even care to know about. i'm also getting a lot more knowledgeable about keeping track of my expenses. making charts and diagrams to keep it all in check.

guess how we shop though?

you'd really be amazed at how much you can save. i just said gap because that's where i personally go nowadays. and actually, before that i would spend no more than $10 on shirts or clothes, only on special occasions maybe $15. shoes, i would be lucky to be allowed to spend $30...that's pricey.

i didn't have video games until i was like 15. but we played lots of sports, so it was cool.

actually, we go to sears when they have sales. my parents always tell me about buying $2-$7 shirts, $10 shoes, etc. cars? just got a new one...since then we'd been driving the same car for the past 10 years. my parents started my tuition fund really early. my siblings both got tons of scholarship money because they're smarter than me. when travelling, which we do a ton of, we always find deals that no one has even heard of. it takes lots of effort, but it's sure worth it.

none of our real estate has actually really appreciated over the years, very unfortunately...actually probably depreciated.

you know, i wouldn't have believed me either...if i was a byproduct of this society. i am very thankful to have such parents who have raised me right. like i said, my dad only came here w/ $500. he worked as a cabi in nyc, then worked at mcdonald's, then at hotels, then slowly made his way up to a steady career. i am very thankful for the foundation they have established so i don't have to start from scratch like they did.

and these are the fruits of many years of work. my dad is close to retiring. i guess you guys are surprised because you're probably assuming a lot of things like he's young or something. he's not.

anyhow, it's not impossible. just put your mind to it. stop living feeding the consumerist society and break away from it all. it's different, and possibly awkward at first. and i felt weird sometimes in school and stuff not having all the stuff the other kids have...but ha, look at me now suckers.

dream big

 

[chickenlegs03]

Chickenlegs...

Those saran wrapped/duct tape 'packages' that are coming to your house(s) aren't from Fed Ex my friend.

AS

dude, i was wondering what that white powdery stuff was on the edges...chalk maybe? i heard teaching utensils are growing businesses right now, especially with education and the no child left behind thing getting more funding.

i think it's a great investment. if you want in, let me know.

 

[ShizamDaMan]

Houses in California are appreciating way too fast. It's a big problem for people who don't make a crap ton of money. Some friend of my parents in Cali have a house that's value has skyrocketed from 200,000 to over 500,000 in a few years. All I can hope for them is some good luck if they ever try to sell their house and buy another one.

 

[seanchai]

Just a side note...

I think it's interesting that people tend to disparage "$200 shoes and $300 jeans", but think it's important to buy $60k cars. The argument generally goes that cheaper shoes and jeans get the job done, but in reality shoes and jeans, just like cars, are status symbols. My sh¡tty 1999 Sentra gets wherever an M3 needs to go (just much, MUCH slower). I place much more value on nice clothes that convey good things about myself. I've heard that this is a product of my surroundings: people in suburbia tend to place emphasis on nice cars and houses because these are things that take up space, something more common in those places than in a city, where clothes and other personal effects become more emphasized. Living "the good life" is therefore a function of what you and your clothes reside in, rather than just what you yourself reside in.

Not that there's anything wrong with that. But if I came into a large amount of money, the first thing I'd think would be "YES! Bespoke suit!" rather than "YES! New car!"

 

[GirlCrazy]

But if I came into a large amount of money, the first thing I'd think would be "YES! Bespoke suit!" rather than "YES! New car!"

Depends on how you come into it. If you make all that mula selling your house, your first thought is "oh sh!t now I'm homeless". Your second thought (unless your name is STR8UP) is "holy sh!t I wanna buy something". And if you're really twisted, you make your woman literally scream by suggesting you put it all down on red at a roulette table.

Our first couple of days with money was:

1. Luggage
2. Laptops
3. A large SUV

7 days later:

*****ing that I can't fold my wallet with $10k in 100's and wondering where the hell I'm gonna live.

60 days later:

Closed escrow on the new house.

 

[diplomatic_lies]

If I suddenly came about a large amount of money, my 1st thought would be, "Where the hell did this cash come from?"

 

[backbreaker]

come on guys..

let's someone has an APR at 5.5 percent.

That is now a 1055000 house (if i am not mistaken, the interst might roll over every year, have to ask Star8up about that)

say it's broken down to a 30 year buy plan which is a $2930 payment every month.


a guy who makes 90000 a year before taxes could afford to stay in that house, without too much trouble, assuming he knows how to budget his money. If he is married and they have additional income coming in, he's good to go.
.

well, A-Unit pretty much hit the nail on the head.. I have bought a house but I bought it outright, but I do know that with everything that has to do with credit, what's as important as your credit, is your income/debt ratio. It doesn't matter how well you can save, no bank in their right mind is goign to put you in a 3k house a month if you have 4.5k coming in. My first apartment, they told me as long as I made 3 times rent per month (which I did) I could move in. Cars are the same way.


My personal rule of them for stuff like that is... if you, or you and your spouse can't save up every penny you have for a year and pay it off or come damn close, you don't need it. Car, house, etc.


I would never, ever buy a car that is worth more than I make a year. That's just stupitity.

"i have doctor relatives - they make 300-500k/yr. lawyers *start* out of law school at 80k, lawyers make 200k easy after a few years."

that's so not true.. it all depends on how good you are at your job, just like anything else. Getting out of law school isn't like cashing a million dollar payday. Where do you think public defenders and the ambulance chasers come from?

If you are GOOD, top precentile of your class good, then yes, big law firms are always looking to add talent, just like the technology field.

Our old lawyer for my old company was about 36, and was making at leat 500k a year... then again I have seen some laywers who make considerably less than me.


"I think it's interesting that people tend to disparage "$200 shoes and $300 jeans", but think it's important to buy $60k cars."

So so true. I hate people who think think they are wasting money on expensive clothes. Contary to what you may think, clothes are expensive for a reason. It's not like Gucci just woke up one day and said "you know what, wer are just going to charge 200 dollars more for shirts that are the same thing you can get at Wal mart! Brilliant!!!". If they weren't worth thier salt, they wouldn't be able to charge as much as they do.

Actually, usually shirts/pants/slacks that are higher in price tend to last longer, made with better fabrics, etc. eihter buy a pair of pants and take care of them for 30 bucks, and end up buying an ew pair in a year and a half or two, or pay 100 bucks and keep them for 10 years. You loose money in the front, but save alot in the back.

When it comes to dress clothes, slacks, blazers, you can't sakte buy on cheap.. you just can't... which is what I tend to wear more times than not now.

You will never be happy in life if you are always worried about doing what's the most cost effective things... getting the civic, even though you want, and can afford the new Infiniti G35 Coupe, because it's chepaer and better on gas. You have to learn to find the happy medium.. some things I am very finanically prudent on... Food, Gas, misc expenditures, bills, etc.. some things I am not. Clothes, I love too much to be cheap on, I have a bigger wardrobe than most women. Cars is another. I drive what I like. Neither I am just outlandish with, but you get the point.